Even the ultrawealthy are finding they’re not immune to Canada’s housing shortage, and nowhere is that truer than in the country’s most expensive major market, Vancouver, B.C.
Luxury real estate in the city broke local records last year, with sales of mansions priced over C$10 million (Canadian) or $7.9 million in U.S. dollars growing 240%, faster than anywhere else in Canada, according to a report Wednesday by Sotheby’s International. Toronto wasn’t far behind with 238% growth.
Those transactions included the highest price ever paid for a single-family Vancouver home. Sotheby’s wouldn’t say how much the property, known as Belmont Estate, went for, but CTV News cited a price of C$42 million.
High-end real estate has been buoyed by the same pandemic-led forces that have made Canada’s overall housing market one of the hottest in the world: low interest rates and high interest in living spaces. Demand for luxury housing has been juiced even further by the surging stock market, making many rich Canadians richer.
But Canada hasn’t built enough houses, big or small, in recent years to keep up with this surging demand or with population growth. The number of properties listed for sale nationally has plunged to a record low. In Vancouver, about 5,000 homes were for sale at the end of last year, the fewest in data going back 30 years.
In the luxury segment, houses worth C$10 million or more are staying on the market for a shorter time, weeks rather than months, said Kevin O’Toole, managing broker at Sotheby’s in Vancouver.
One factor holding down inventories is that luxury-home buyers, seizing on record-low mortgage rates, are holding onto their old properties longer. Rather than put their homes up for sale in tandem with their search for a new one, these buyers are holding onto their old ones, too, and slowing down the turnover process, O’Toole said.
“A luxury homeowner does not want to leave their luxury home because they don’t know where else they would go,” O’Toole said. “They don’t want to sell their place and not have a home to go to.”